Most military spending goes to personnel

More than half of Portugal's expenditure in the area of ​​Defense is destined for personnel costs, followed by equipment, an investment that will have to increase by around 1.3 billion euros this year to reach the 2% target.

According to the most recent report by the NATO Secretary General, from 2024, which details the expenditure of the 32 members of the Atlantic Alliance, Portugal invested around 4,147 million euros in Defense last year, corresponding to 1.46% of the national Gross Domestic Product (GDP).

These NATO estimates, published in April of this year, place Portugal as the sixth country in the alliance that invested the least in Defense that year, ahead only of Canada (1.45%), Slovenia (1.37%), Luxembourg (1.30%), Belgium (1.29%) and Spain (1.24%).

On the eve of the NATO summit, which will take place in The Hague, Netherlands, on Tuesday and Wednesday, the Portuguese Government has already made a commitment to reach 2% of GDP this year.

About a month after this report by the NATO Secretary General was published, the Ministry of National Defense indicated that “even with an upward revision of the growth of the national economy” the 2024 execution should close at 1.58% of GDP, corresponding to 4,481.50 million euros – a value slightly above that of the Alliance.

Taking this value into account, and the Bank of Portugal's outlook for Portuguese GDP in 2025, Portugal will have to invest around 1.3 billion more than it currently does to reach the 2% target.

Analyzing the Atlantic Alliance report, of the approximately four billion euros that Portugal allocated to Defense in 2024 , the largest share (58.6%) is allocated to personnel expenses , which in NATO calculations include expenses with military personnel and civilians working in the Armed Forces, as well as pensions.

Over the last ten years, according to the document, personnel expenses in Portugal have always represented the majority expenditure, reaching almost 82% in 2015, although they have gradually decreased to date.

The trend is also seen in State budgets, particularly this year, which includes 1,314.5 million euros for this category, corresponding to 42.9% of the total consolidated expenditure allocation.

After personnel expenses comes the “equipment” category (19.5%). NATO includes equipment expenses as well as research in this area in this calculation.

Analysing data from Portugal over the last ten years, the equipment category started at 8.43% in 2014 and has been on an upward trajectory, despite never having exceeded 20% (a commitment set in 2014 at the Wales summit, which also set 2% of GDP, and which the Portuguese Government intends to achieve this year).

In third place (17.9%) is the category of “operations, maintenance and other expenses”, followed, finally, by infrastructure costs (3.9%).

The value of Portuguese investment in military infrastructure has always been low: from 2014 to 2020 it did not reach 1% of the total. In 2021, there was a jump to 4.48% but the following year it fell back to 2%.

NATO Secretary General Mark Rutte has already announced that he will propose to allies to increase defense spending to 5% of GDP : 3.5% for “pure spending” on defense (armed forces, equipment and training) and 1.5% of annual GDP on defense and security-related investments, such as infrastructure and industry.

Spain criticized the 5% target, even rejecting it, and Slovak Prime Minister Robert Fico alluded to a possible exit of his country from NATO, stating that “neutrality would be beneficial for Slovakia” and classifying the proposal demanded by Donald Trump as “irrational”.

Also in Portugal, the amount raised reservations among the two largest opposition parties, Chega and PS.